People Will Pay for True Ownership

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When your device keeps you from using it as you please, it's hard to say you really own it. I recently found out that real ownership is more valuable than the pseudo-ownership that is so common today–in a good way.

Back in 2010, I paid $99 for an Apple TV–technically, the Apple TV (2nd generation). Recently, it stopped receiving software updates, so I decided to put it on eBay. I was surprised that I was able to sell a piece of four-year old electronics for $161–it's not often you make a profit on old devices.

The reason for this is simple–tinkerers have figured out how to jailbreak the 2nd generation Apple TV, but not the 3rd gen one, which is the one Apple currently sells (also for $99). Until the newest OS for the Apple TV was made available only for the 3rd gen Apple TV, the difference between the two models was pretty subtle: the 3rd gen device has a better CPU, more RAM, and outputs 1080p video, instead of just 720p. But even though the 3rd gen Apple TV has better specs than the 2nd gen one, the 2nd gen was selling, used, at a substantial premium over a brand new 3rd gen one.

That's because jailbreaking makes a device more useful–it allows users to install their own software on the Apple TV, which, like most gadgets nowadays, is really just a computer. “Jailbreaking” is a term used most often in the Apple community, but it broadly means gaining the ability to do with any device whatever you want with it–whether it's installing software from an “unapproved” source, or obtaining the administrator or “root” access necessary to make certain modifications.

A device that a user can modify, add capabilities to, and freely install software on is more valuable than one where she can't. And people are willing to pay for that capability. Pre-jailbroken Apple TVs are selling for around $230 on eBay right now. Back when 2nd and 3rd gen Apple TVs even ran the same operating system and the only difference between them was the 3rd gen's better specs, unmodified Apple TV 2nd gens were selling for even more.

Overall, this shows that there's no contradiction between a good user experience and user control. Some people want the Apple TV instead of more-open competitors like the Roku or the Amazon Fire TV because they like the Apple TV experience. Not only does it give you access to iTunes content not available on the other devices and features like AirPlay, it's a simple and easy-to-use device. Jailbreaking doesn't change that. I've been a Mac user for many years–I don't think that the Mac would be a better device if it were more locked down and prevented me from installing software from arbitrary sources, the way an iOS device or the Apple TV does. (For the record, I think that the way Android handles this–with an “Allow me to install software on this device from outside the app store” setting that is off by default–strikes the right balance between offering a simple experience for users that want that while giving expert users more freedom.)

At some point, even though it's freely modifiable, the 2nd generation Apple TV will fall so far behind the state of the art that it will no longer be so valuable. But this brief period where an only slightly obsolete, but modifiable device exists is evidence some consumers are willing to pay more than twice as much for a device they truly own and control than for one they do not, and they value true ownership over features like slighter-higher definition HD.